Question
Subject name: Accounting & Finance Decision-Making Mangers The below problem is a Differential Analysis problem, including *****Special Order type problem*** Please utilize differential analysis to
Subject name: Accounting & Finance Decision-Making Mangers
The below problem is a Differential Analysis problem, including *****Special Order type problem*** Please utilize differential analysis to solve the problems. Please show all work and responses in the answer with an explanation... on the Excel worksheet with formulas. Flextek Company has an annual plant capacity of 3,000 units. Data concerning this product are given below:
| Annual sales at regular selling prices | 2500 | units | ||||
| Manfacturing costs | ||||||
| Variable | $ 25 | per unit | ||||
| Fixed (annual) | $ 75,000 | |||||
| Selling and administrative expenses: | ||||||
| Variable (sales commissions) | $ 5 | per unit | ||||
| Fixed (annual) | $ 15,000 | |||||
The company has received a special order for 400 units at a selling price of $50 each. Regular sales would not be affected and sales commission on the 500 units would be reduced by one-half. This special order would have no impact on total fixed costs. Required: Determine whether the company should accept the special order. SHOW YOUR WORK!
| Annual sales at regular selling prices | 2500 | units | ||||
| Manfacturing costs | ||||||
| Variable | $ 25 | per unit | ||||
| Fixed (annual) | $ 75,000 | |||||
| Selling and administrative expenses: | ||||||
| Variable (sales commissions) | $ 5 | per unit | ||||
| Fixed (annual) | $ 15,000 | |||||
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson
6th edition
978-0077400163
